Nasdaq Has to Re-Earn Trust After Facebook Fault

While Facebook shares look headed below $38 on its disappointing second day, shares of Nasdaq OMX are taking their own hit this morning after hampering the most-traded IPO in history.

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The exchange scored a victory over rival New York Stock Exchange by landing Facebook, but the win now stings.

As Jacob Bunge writes in the morning’s WSJ:

The historic IPO of Facebook Inc. on Friday should have re-established Nasdaq OMX Group Inc. as the go-to market for a new generation of companies stretching the boundaries of technology and communication. Instead, it revealed shortcomings on both fronts for Nasdaq and threatened to saddle some brokers with significant losses.

CEO Robert Greifeld said on a conference call with reporters on Sunday that he didn’t anticipate lasting damage to Nasdaq’s reputation after the Facebook IPO problems. He said Nasdaq’s positioning to capture new IPOs was “stronger than ever.” But shares are down 2.5% premarket at $21.45 after dropping 4.4% amid the Friday Facebook Flop, and Keefe, Bruyette & Woods warns this morning that Nasdaq needs to prove itself to investors now.

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